overcrowdedprisons_077_mac.jpg Prisoners l to r- Ronald Rule,51, Jason Seidel,26, Cecil Goodrum,44 and Jarrett Smith, 24. Wesley Wallace,42 in in the back behind Seidel. Prisoners inside the D-Building gymnasium where inmates are housed due to overcrowding. Bunks are stacked three high to accomodate the imates. Pleasant Valley Sate Prison in Coalinga, Ca., one the most overcrowed prisons in the State of California. the prison population reaching close to 225% of the capacity it was designed for some 10 years ago. Event in, Coalinga, Ca, on 12/5/06. Photo by: Michael Macor/ San Francisco Chronicle Mandatory credit for Photographer and San Francisco Chronicle No sales/ Magazines Out

As the costs for fixing the state's troubled corrections system rocket higher, California is headed for a dubious milestone -- for the first time the state will spend more on incarcerating inmates than on educating students in its public universities.

Based on current spending trends, California's prison budget will overtake spending on the state's universities in five years. No other big state in the country spends close to as much on its prisons compared with universities.

But California has all but guaranteed that prisons will eat up an increasingly large share of taxpayer money because of chronic failures in a system that the state is now planning to expand.

Under a new state law, California will spend $7.4 billion to build 40,000 new prison beds, and that is over and above the current annual operating budget of more than $10 billion. Interest payments alone on the billions of dollars of bonds that will be sold to finance the new construction will amount to $330 million a year by 2011 -- all money that will not be available for higher education or other state priorities.

"California is just off the charts compared with other states in corrections spending," said Michael Jacobson, director of the Vera Institute of Justice in New York, a leading research organization. "Budgets are a zero-sum game, essentially. The money for corrections comes from other places. The shame of it is that California could have improved crime rates and a better funded higher education system if they ran things better."

In fact, even some supporters of the recent prison reform legislation, AB900, say they harbor deep doubts about the corrections department's ability to improve things, no matter how much is spent. But they say there is no choice, and that the result is that Californians are going to have to accept throwing billions of dollars more at the problem, while trusting a corrections department that has a history of failure.

"I'm not defending the damn department," said Assemblyman Todd Spitzer, R-Orange, the chairman of a state Assembly committee overseeing the state's prison construction efforts. "The department is a shambles. They couldn't build their way out of a paper bag. Everyone has a reason to be skeptical. Everyone is holding their breath, hoping that this time they're successful."

Asked if the prison spending accurately reflected the state's values and priorities, several politicians insisted it did not, and some suggested it was something of an embarrassment for a state that in other areas, such as environmental programs, likes to think of itself as a pioneer in smart policymaking.

"I'll tell you what, it's clearly not a statement of our priorities," said Assembly Speaker Fabian Núñez, D-Los Angeles. "Our policies are hurting the economy of California. This is a disservice to our economy."

Núñez blamed the prison spending on a get-tough-on-crime mentality among politicians that equates more prison spending with safer streets, when that is hardly the case.

"A budget is a statement of priorities," said Bill Shiebler, president of the University of California Student Association, which has been fighting sharp increases in state university tuition fees for several years. "I do think our state's got its priorities wrong. The governor is burdening people who work the hardest with what are tax increases. It seems they're more interested in locking people up than giving people an opportunity in life."

Michael Genest, Gov. Arnold Schwarzenegger's finance director, said that he, too, was uncomfortable with the state committing such a large sum to prisons, but that mismanagement and failed rehabilitation programs in the past made it unavoidable.

"I don't think it's a good thing," said Genest. "It's unfortunate."

He said that one of the key drivers was the fact that the state pays the guards and other prison employees far more than any other state, a policy choice the state had made in past years. In addition, he said, the porous border allowed too many lawbreakers from Mexico to enter the state, where they eventually ended up in prison.

But Genest defended the increases in spending as needed to institute better rehabilitation programs, which would eventually save money, although he said it was uncertain when or if they would show results.

"It's not going to happen overnight, and no one can say how much it's going to save," said Genest. "But it should eventually save money."

According to the May revisions of Gov. Arnold Schwarzenegger's budget, the state will spend $10 billion on prisons in fiscal 2007-08, a 9 percent increase from last year.

Steve Boilard, a legislative analyst, said that actual spending on the state university systems is already at about parity with prisons spending. The budgets, he said, for the University of California, the California State University and the community colleges come to $10.5 billion in fiscal 2007-2008. The rest of the higher education budget includes financial aid for student and other noninstructional programs.

Following the historic growth rates, in fiscal 2012-2013, prisons spending will come to about $15.4 billion a year while overall higher education spending will come to $15.3 billion.

Some politicians are calling the new construction spending and new rehabilitation programs an investment that eventually will pay off in the form of reduced recidivism. California has among the highest recidivism rates in the country, with 70 percent of released inmates ending up back in prison within three years. But even advocates of reform say that payoff will be long in coming.

"We all have a wish that prison spending would take a smaller percentage of our budget," said Spitzer. "However, that's a decade away, in my opinion. For another decade we're going to need large infusions of money to deal with this and our off-the-chart recidivism rates."

California is alone among big states in spending so much on prisons. Texas, for instance, will spend $4.5 billion on higher education in 2007 and $2 billion on prisons, according to the National Conference of State Legislatures. Florida will spend $3.9 billion on its universities and $2.1 billion on prisons, while New York has budgeted $3.5 billion on its universities and $2.2 billion on prisons.

According to the conference of legislatures, seven small states, such as Massachusetts, Connecticut and Delaware, spend nearly as much on prisons as higher education, but most states budget two or even three times as much for universities.

The new reform program, AB900, includes about 40,000 new prison beds, about 8,000 of those for medical and mental health care. Currently, there are about 173,000 inmates in the state prisons, which is about double the design capacity. The legislative analyst projects that the population will grow by another 17,000 over the next five years.

Jacobson of the Vera Institute said one of the greatest problems in California is not just that it spends so much on prisons but that it gets such poor results. New York state, for instance, is enjoying both a declining inmate population and declining crime rates.

"When you think about some of the alternatives for spending that kind of money, there are much better things you can do for public safety that would be a lot more effective," he said.